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Pension Plan Limitations for 2010

Pension Plan Limitations for 2010

The Internal Revenue Service (IRS) has released the 2010 cost-of-living adjustments (COLAs) for IRAs and retirement plans. The IRS makes the adjustments according to specific formulas that include a comparison of cost-of-living figures. Most of the 2010 limitations remain unchanged due to a lower cost-of-living for the period of calculation in 2009 compared to 2008. According to the IRS, the IRA contribution limit and all related retirement plan limitations will not change for 2010. The only cost-of-living increases for 2010 are those associated with income limitations for Traditional IRA deductions, Roth IRA contributions, and the saver’s tax credit.

Traditional IRA Deduction Modified Adjusted Gross Income (MAGI) Ranges

For Traditional IRA deductions, the MAGI ranges for single active participants and spouses married to active participants were each increased by $1,000 for 2010. The 2010 MAGI ranges for Traditional IRA deductions are as follows.

Roth IRA Contribution MAGI Ranges

The only MAGI range for Roth IRA contribution eligibility that increased for 2010 is that for married individuals filing joint income tax returns. The 2010 MAGI ranges for Roth IRA contributions are as follows.

Saver’s Tax Credit

Some, but not all, of the adjusted gross income limits associated with the saver’s income tax credit for IRA contributions and salary deferrals in retirement plans increased. Following are the 2010 saver’s credit income limitations.

2010 Adjusted Gross Income*Applicable
Percentage
Joint returnHead of householdAll other cases
OverNot OverOverNot OverOverNot Over
 $33,500 $25,125 $16,75050
$33,500$36,000$25,125$27,000$16,750$18,00020
$36,000$55,500$27,000$41,625$18,000$27,75010
$55,500 $41,625 $27,750 0

Unchanged Limitations

The unchanged limitations for 2010 include:

Check out Credit Unions Online's Retirement Calculator.

by Staff Writer
Published November 23, 2009
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